Nintendo already dominated the handheld business, what are you talking about?

N4G should really implement a block button. There's just some people's comments that turns me off from coming to this site, like this obscure guy. Its sad seeing this deluded comments on every single post

That’s not true at all about the Switch. The general consensus of the Switch was that it would at worst do similar number to the 3DS (70m - 75m), and at best similar number to the Wii (+100m). Nintendo’s handhelds had ALWAYS outsold their consoles in the same generation, with the Wii being the only console to ever outsell any of the handhelds at all, and that was the blue ocean strategy.

People didn’t think the SteamDeck was a bad idea, the issue with that was the vocal minority screaming about high-end specs as if that’s what the majority of PC gamers own, which is a far cry from the truth. The concern was Valve isn’t a hardware company and as you said people didn’t want a SteamMachine 2.0. There wasn’t doom and gloom, people were just cautiously optimistic. The doom / gloom you speak of was people assuming Steam Deck would do Nintendo numbers, which was unlikely to happen as it was supposed to be an accompanying device for PC gamers and possibly console gamers who don’t want to dive into a full PC market which was a niche audience.

The issue now is that there are way too many players in this space that Microsoft and even Sony (who already attempted this) have to face to win people over. The Xbox consoles are losing ground generation after generation, and a handheld isn’t really a fix in the eyes of many, especially when you can already GamePass everything on existing handhelds PCs.

The problem with these handhelds for Sony and Microsoft is there has to be a hard choice made.

1. Entry price, $199 - $299
Or
2. Peak Performance, $399 - $599

Entry Price $199 - $299 gets you lower-end mobile hardware, which has come a long way and fine for streaming GamePass, but native Series games are going to be a struggle porting, or you can get a Series S.

Peak Performance, $399 - $599 get you dedicated hardware around the Xbox Series S performance (much higher with FSR4), but the Series X is still going to be more powerful and $399.

So who are these products for, especially Microsoft when there are already devices out now that do likely +90% of what a Xbox handheld would do, and +80% of what a PlayStation tablet would do?

There’s nothing wrong with them doing this, I just don’t see the market being there for it to be an extremely successful platforms, at best I see the handhelds doing around 1/3 of their console sales as a way to take your consoles on the go, as long as it’s completely seamless.

Yes but Nintendo had proven success of them, Xbox hasn't and are releasing one in their worst period in 20 years. That's likely the difference

Why would a sane person buy the Xbox handheld, if Switch 2 is going to have all Nintendo exclusives, a full third party support & a strong Xbox studios support (as per Phil Spencer)?

Well there is a key difference between Nintendo, Valve and Microsoft, two of them are extremely successful with decades under their belt of successes in gaming, the other bought some brief success but has been on a downward spiral for over a decade. Two of the brands dominate their respective market segments, the other is scrambling to remain relevant. Guess which ones are which.